As expected, the US has now imposed an additional $200 billion in tariffs on more than 5,000 items, significantly widening the net and upping the ante. While the aim is to put further pressure on the Chinese economy, this will also cause suffering for US companies in China, with nearly half of our members telling us earlier this month that this latest round of tariffs would have a “strong negative impact” on their business.

Two further issues are cause for great concern. With China promising to levy an additional $60 billion in tariffs and the US now saying that a further $267 billion in tariffs would then immediately be readied, the downward spiral that we have previously warned about now seems certain to materialize. Contrary to views in Washington, China can – and will – dig its heels in and we are not optimistic about the prospect for a resolution in the short term. No one will emerge victorious from this counter-productive cycle. 

Secondly, there are many other ways that US businesses in China are being disrupted, in addition to tariffs. More than half of our members say they have experienced a rise in non-tariff barriers in recent months, with increased inspections and slower customs clearance among the most favored measures being applied by Beijing. However, this will not result in bringing more business back to American soil: Just 6% of our member companies say this current US-China trade dispute would make them consider relocating operations back home.

The best way forward is an imminent return to results-oriented negotiations. However, US companies in China have faced real and legitimate concerns for many years and so any future discussions must be based on fair and reciprocal treatment and address the need for sustainable structural reforms.

William Zarit, Chairman of American Chamber of Commerce in China